Carbon Disclosure and Green Innovation: Evidence from High-Emission Enterprises in Vietnam

2.1 Regulatory environment and international standards

2.1.1 Environmental regulation → Green innovation → Sustainable corporate performance

Environmental regulation (REG) is widely recognized as an important external driver encouraging firms to adopt environmentally responsible practices and invest in GI. Regulatory policies often impose compliance requirements that increase short-term operational costs, particularly in pollution-intensive industries [3, 14]. However, well-designed regulations can also stimulate firms to develop cleaner technologies and more efficient production processes, thereby improving environmental performance and long-term competitiveness [15]. The effectiveness of regulatory environments largely depends on enforcement mechanisms such as monitoring systems, environmental courts, technical assistance programs, and financial incentives [16], as well as international market pressures from global supply chains and export standards [17]. These institutional mechanisms influence how firms respond to regulatory pressure and determine whether REG becomes a barrier or a catalyst for innovation [18].

International evidence shows that REG can enhance GI, but its effectiveness depends on context and enforcement mechanisms, such as monitoring and technical support [13]. Rules that include monitoring and technical support can turn compliance pressure into a catalyst for innovation [5]. In China, the establishment of environmental courts significantly increased the number of green patents, utilize the Environmental Policy Stringency index and determine that the impacts of emission reduction are contingent upon the specific type of policy instrument employed [19]. Shen et al. [20] identified significant impacts inside energy-intensive businesses from an industrial standpoint. Zhang et al. [21] presented supplementary evidence from developing economies regarding the correlation between REG and GI. REG serves as a GI driver solely when supplemented by monitoring, support, and a suitable policy design, providing stronger causal evidence than correlation research.

In Vietnam, the influence of REG on GI is primarily seen through internal support structures. Van et al. [22] demonstrated that REG has not been rigorously enforced. Le and Gia [23] affirmed that GI, in conjunction with green corporate social responsibility, facilitates the conversion of regulatory pressure and international standards into sustainable competitive practices.

Research in Vietnam concurs [22, 23], highlighting the critical importance of internal competencies (GTL, EMA, CSR) in the context of inadequate enforcement. Consequently, the Vietnamese setting must assess both the degree of law enforcement and internal preparedness to comprehensively comprehend the REG → GI mechanism.

H1: REG has a positive impact on GI.

2.1.2 Environmental regulation → Carbon disclosure → Sustainable corporate performance 

REG, particularly reporting requirements and transparency standards, can encourage firms to disclose more environmental and carbon-related information. Regulatory pressure increases the need for firms to demonstrate compliance with environmental policies and sustainability expectations. As a result, firms tend to improve the level and quality of CA in order to reduce information asymmetry, enhance transparency, and maintain legitimacy with regulators, investors, and stakeholders.

From a signaling and transparency perspective, CA serves as an important mechanism through which firms communicate their environmental commitment and risk management practices. Greater transparency can reduce information risk, strengthen investor confidence, and improve corporate reputation, which may ultimately contribute to SCP. Prior studies suggest that improved environmental disclosure helps reduce uncertainty and strengthens corporate accountability [24]. Empirical research also indicates that CA can enhance sustainable performance, particularly when combined with GI and sustainability strategies [25]. However, some studies suggest that the relationship may not always be linear. For instance, moderate levels of disclosure can improve emission reduction efficiency, while excessive disclosure may generate diminishing returns [24]. In addition, the interaction between REG and disclosure policies can reduce environmental risks when supported by clear policy frameworks and institutional guidance [26].

The legal framework for CA in Vietnam remains inadequate, leading many enterprises to report mainly to satisfy the demands of foreign supply chains and investors [27]. Van et al. [22] underscored the significance of green leadership and a dedicated work ethic in advancing GI, which indirectly bolsters corporate accountability. Research by Le and Gia [23] indicated that GI and green corporate social responsibility (CSR) facilitate the influence of green leadership, demonstrating that REG can improve CA and sustainable consumption practices SCP.

In contrast to countries that have strict REG frameworks that assist in the development of CA, the reduction of risks, and the increase of SCP, the REG→CA→SCP chain in Vietnam continues to rely significantly on external pressures and voluntary initiatives. At present, the primary motivating factors are international market requirements, environmental management accounting (EMA), and GTL, rather than domestic laws.

H2: REG has a positive impact on CA.

2.2 Green transformational leadership 

GTL refers to a form of transformational leadership that emphasizes environmental values, vision, and motivation to achieve sustainability goals. Leaders who adopt this style encourage employees to support environmental initiatives, integrate sustainability into organizational strategies, and allocate resources for green practices. Through vision sharing, inspiration, and environmental awareness, GTL helps build an organizational culture that supports sustainable development and green transformation.

2.2.1 Green transformational leadership → Green innovation → Sustainable corporate performance

From a resource and capability perspective, leadership plays an important role in shaping firms’ innovation orientation. GTL encourages employees to participate in environmental initiatives, provides training and empowerment, and supports the development of green technologies and environmentally friendly processes. By promoting environmental awareness and providing strategic direction, GTL helps firms integrate sustainability into their innovation activities. Previous studies indicate that GTL can strengthen firms’ environmental capabilities and facilitate the adoption of GI practices [28, 29]. For instance, research shows that GTL combined with EMA can enhance firms’ ability to identify environmental costs and opportunities, thereby supporting GI strategies and improving sustainable performance. Evidence from Vietnam also suggests that green leadership, together with corporate social responsibility initiatives, encourages manufacturing firms to implement sustainable practices and GI [22, 23]. Based on these arguments, green transformational leadership is expected to promote firms’ GI activities.

H3: GTL has a positive impact on GI.

2.2.2 Green transformational leadership → Carbon disclosure → Sustainable corporate performance  

Besides influencing innovation activities, leadership can also affect corporate transparency and environmental reporting practices. Leaders with strong environmental awareness tend to prioritize environmental accountability and encourage firms to disclose environmental and carbon-related information to stakeholders [30]. From a transparency perspective, GTL can influence CA through two main mechanisms. First, environmentally oriented leaders often integrate carbon measurement and disclosure into corporate sustainability and CSR strategies, thereby increasing the level of environmental transparency. Second, GTL may support the adoption of management tools such as EMA, which improves the accuracy and reliability of emission data and facilitates carbon reporting. Empirical studies suggest that leaders with strong environmental commitment are more likely to promote environmental disclosure and sustainability reporting practices [29, 31, 32]. In addition, low-carbon leadership has been found to encourage emission-reduction initiatives and increase the level of CA within firms [33]. These findings indicate that leadership orientation plays an important role in shaping firms’ environmental transparency. Therefore, green transformational leadership is expected to enhance CA practices in firms.

H4: GTL has a positive impact on CA.

2.3 Digital transformation → Carbon disclosure → Sustainable corporate performance

DT plays an important role in improving corporate transparency and environmental reporting. Through data digitalization and automated reporting systems, firms can collect, process, and disclose environmental information more efficiently, thereby improving the transparency of corporate accountability [34]. In addition, digital technologies enhance internal governance and monitoring systems, which support emission management and environmental reporting practices [35]. Empirical studies also suggest that DT facilitates sustainability reporting and emission monitoring by improving data accuracy and accessibility [36, 37]. However, the effectiveness of DT in promoting CA often depends on institutional conditions such as regulatory frameworks and disclosure requirements.

In Vietnam, DT in environmental reporting remains at an early stage and is largely driven by pressures from international supply chains and export markets. Limited regulatory enforcement and governance mechanisms may constrain the potential impact of DT on CA and SCP.

H5: DT has a positive impact on CA.

2.4 Green innovation

2.4.1 The impact of green innovation on carbon disclosure

GI has been widely recognized as a key driver for improving firms’ environmental performance and environmental transparency. By adopting cleaner technologies and environmentally friendly production processes, firms can reduce emissions and enhance the credibility of their environmental information disclosure. As a result, firms engaging in GI are more likely to provide transparent carbon-related information to stakeholders. Empirical studies provide evidence supporting the relationship between GI and CA. Previous research shows that firms with stronger GI capabilities tend to achieve higher efficiency in emission reduction and greater transparency in environmental reporting [38]. In addition, the integration of GI with environmental management practices such as EMA can enhance sustainability performance and improve environmental disclosure [39]. Studies in emerging markets further suggest that GI helps firms respond to climate policies, reduce environmental risks, and strengthen the transparency of CA [25, 40]. Other studies highlight the role of governance mechanisms and stakeholder pressure in strengthening the relationship between GI and environmental transparency [41]. Evidence from Vietnam also indicates that innovation strategies in the carbon credit market contribute to the development of CA practices [42]. Overall, the literature suggests that GI not only reduces emissions but also promotes greater transparency in CA, particularly when supported by effective governance and regulatory frameworks.

H6: GI has a positive impact on CA.

2.4.2 The impact of green innovation on sustainable corporate performance

GI is widely recognized as an important driver of SCP. By adopting environmentally friendly technologies and improving resource efficiency, firms can reduce production costs, enhance environmental performance, and strengthen their competitive advantage. These improvements contribute to enhanced long-term economic, environmental, and social performance.

Empirical evidence supports the positive relationship between GI and SCP. Previous studies indicate that environmental commitment, EMA, and GI jointly enhance SCP [43]. Research in Malaysia also shows that GI and innovation capability significantly improve sustainable competitive performance [44]. Other studies highlight that the effectiveness of GI is strengthened when firms demonstrate strong environmental awareness and leadership commitment [45]. In addition, green transformational leadership can enhance SCP indirectly through GI and environmental performance, highlighting the mediating role of GI in sustainability outcomes [46]. Studies in Vietnam also confirm the importance of GI in enhancing SCP [22, 23, 47]. Overall, the literature indicates that GI significantly contributes to improving firms’ SCP.

H7: GI has a positive impact on SCP.

2.5 The impact of carbon disclosure on sustainable corporate performance

CA is increasingly recognized as an important factor influencing SCP. By providing transparent information about firms’ carbon emissions and environmental practices, CA improves environmental transparency. This transparency reduces information asymmetry and enhances stakeholder trust, which may improve firms’ reputation and access to capital.

Empirical studies generally support the positive relationship between CA and SCP. Prior research indicates that CA, together with green accounting practices and green leadership, can strengthen SCP [48]. Other studies highlight that the effectiveness of environmental disclosure increases when firms adopt comprehensive green strategies and environmental management practices [49]. Furthermore, transparent environmental reporting improves the reliability of corporate information and enhances stakeholder confidence, thereby contributing to better sustainability performance [50, 51]. Integrated reporting that includes carbon-related information may also create market-recognized green advantages and improve long-term corporate value [52].

However, the effectiveness of CA may depend on institutional and governance conditions. In countries with strong legal and regulatory frameworks, CA helps reduce information risk, facilitate access to capital, and improve firm value. In contrast, in developing economies such as Vietnam, the impact of CA may depend on supporting mechanisms such as green accounting, governance quality, and strategic environmental management [51, 53]. Overall, the literature suggests that CA contributes to improving SCP.

H8: CA has a positive impact on SCP.

2.6 Green competitive advantage and the moderating role

GCA refers to a firm’s ability to gain competitive benefits from environmentally friendly strategies, technologies, and capabilities. Recent research suggests that GCA plays an important moderating role in the relationship between environmental practices and firm performance.

Previous studies indicate that GCA strengthens the impact of GI on SCP. Firms that possess strong GCA are better able to convert GI activities into market value and long-term sustainability outcomes [53-56]. Similarly, GCA may enhance the effectiveness of CA. By leveraging environmental information strategically, firms can improve their reputation, attract environmentally conscious stakeholders, and strengthen their competitive position [51].

Other studies also highlight the importance of green capabilities and green accounting tools in enhancing firm value and sustainability performance [50, 52]. These findings suggest that environmental initiatives such as GI and CA do not automatically improve SCP. Instead, firms must possess sufficient green capabilities to transform environmental initiatives into competitive advantages.

In emerging economies such as Vietnam, the moderating role of GCA may be particularly important. Due to weaker regulatory enforcement and institutional constraints, firms with stronger green capabilities are more likely to transform environmental practices into sustainable performance outcomes.

Therefore, GCA is expected to strengthen the impact of both GI and CA on SCP.

H9: GCA positively moderates the relationship between GI and SCP.

H10: GCA positively moderates the relationship between CA and SCP.

2.7 Sustainable corporate performance

SCP is a framework for evaluating a company's performance beyond financial metrics, encompassing environmental efficiency and social responsibility, thereby illustrating the equilibrium among economic, environmental, and social advantages over the long term [57, 58]. In the research setting, the term SCP is favored over exclusively emphasizing financial performance or corporate environmental performance because the objective is to evaluate the holistic influence of environmental management policies and practices, such as CA and GI, on SCP. SCP facilitates the incorporation of financial metrics, resource efficiency, ecological performance, and social influence, thereby more precisely representing the intermediary function of environmental accounting instruments and GCA in advancing GI and improving information transparency [31, 61]. Consequently, employing SCP as an output indicator in the study facilitates a comprehensive analysis of the REG→CA→SCP process, while distinctly illustrating the interconnected influence of financial, environmental, and social issues on enhancing corporate performance in emerging economies.

Building upon the theoretical foundations and hypotheses developed above, this study proposes an integrated model illustrating the relationships among REG, GTL, DT, GI, CA, GCA, and SCP, as presented in Figure 1.

Figure 1. Research model

4.1 Assessing the reliability of the scale

The results of the reliability and convergence analysis indicate that all measurement scales meet the required standards. The evaluation results show that the Cronbach's Alpha of each factor ranges from 0.813 to 0.928 meeting the reliability requirements of the scale. The Cronbach's Alpha indexes of each observed variable are all greater than 0.7 [59]. The results of the reliability assessment of the scale, in which some observed variables “GTL_S = 0.642”; “CA_S = 0.651” have loading factors less than 0.700, so they are eliminated from the model. The composite reliability (CR) values range from 0.877 to 0.949, exceeding the recommended threshold of 0.7, indicating a high level of consistency among the observed variables within each measurement scale. The average variance extracted (AVE) value ranges from 0.642 to 0.823, so the scales of each variable in the model all achieve convergent value. The analysis results are shown in Table 1.

Table 1. Reliability and convergence analysis of factors

4.2 Collinearity of observed variables

The results of the multicollinearity test of the observed variables are shown in the Table 2.

Table 2. Summary of VID magnification factors

When reporting the VIF index to check for multicollinearity, assuming that all values below 5 meet the standard [60]. In accordance with the stringent criteria [61], the model satisfies all requirements, as no variable surpasses the VIF threshold of 3.3. Consequently, the model does not contravene multicollinearity and may persist in its application inside PLS-SEM analysis. The interaction variables (GCA x GI, GCA x CA) have a VIF of 1, indicating no multicollinearity. Therefore, the model can be used without the need to remove any variables.

4.3 Difference value test

The results of the Correlation between the variables are shown in Table 3 and Table 4.

Table 3. Correlations between variables

Table 4. Heterotrait-Monotrait Ratio (HTMT)

The correlation matrix shows that the research variables have moderate to high relationships, indicating that they are related but still maintain distinctions, with no excessively strong correlations causing multicollinearity. The values on the diagonal (> 0.8) indicate a high internal consistency within each group of variables, demonstrating that the model is reasonable and the variables have good discriminant validity.

Table 4 shows that all research variables have coefficients < 0.9, indicating that the variables are well differentiated and the model has reliable discriminant validity. The interaction variables (GCA × CA, GCA × GI) have a low HTMT with all other variables, confirming that there is no multicollinearity and that they are suitable for inclusion in the analysis.

4.4 R² and adjusted R²

The results in Table 5 show that the research models achieve a high level of explanation. Specifically, the R² of CA is 0.683 (Adjusted R² = 0.679), GI is 0.788 (Adjusted R² = 0.786), and SCP is 0.806 (Adjusted R² = 0.804). The independent variables in the model explain over 68% of the variance in CA, nearly 79% in GI, and more than 80% in SCP. Compared to previous studies in the field of green management and CA, the result is a relatively high R², confirming that the model has a good fit and the proposed relationships are convincing.

Table 5. R² and adjusted R²

4.5 Specific indirect effects

Table 6 presents the indirect effects, with T statistics > 2 and P values < 0.01, indicating that these indirect effects are statistically significant. For example, GTL indirectly affects CA through GI with a value of 0.388 (T = 4.477, P = 0.000) and affects SCP through GI with a value of 0.198 (T = 6.282, P = 0.000). REG indirectly affects CA through GI at 0.171 (T = 3.652, P = 0.000) and affects SCP through GI at 0.087 (T = 4.694, P = 0.000). The paths through CA to SCP are also noteworthy, such as GI → CA → SCP = 0.327 (T = 4.801, P = 0.000) and GTL → CA → SCP = 0.200 (T = 3.232, P = 0.001). Thus, the mediating variables, including GI and CA, play a crucial role in transmitting the effects from GTL, REG, and DT to SCP, while affirming that the indirect model in the study is highly reliable and convincing.

Table 6. Specific indirect effects

4.6 Official model

The author uses PLS - SEM Bootstrapping analysis, after the first test, the P Values of the hypotheses GCA × GI -> SCP = 0.062 have a significance level (P value) > 0.05, proving that hypotheses H9 are not statistically significant and should be eliminated from the model.

After eliminating Hypotheses H9 (Figure 2), the official research model was shown in Table 7.

The analysis results indicate that GTL positively impacts GI (Beta = 0.680, T = 21.622, P = 0.000) and CA (Beta = 0.349, T = 3.478, P = 0.001), indicating that GTL not only promotes GI but also enhances the level of CA within the enterprise, thereby indirectly improving SCP. These results are consistent with previous findings [28, 29], as well as observations in Vietnam [22, 23]. Additionally, the impact of GTL → CA aligns with the international trend of "Low-Carbon Transformational Leadership" [30] and is supported by evidence from Huynh and Nguyen [32] regarding carbon governance. Thus, the current study supports and expands upon both international and domestic evidence, while highlighting the indirect role of GTL through GI and CA before impacting SCP, thereby supporting the validation and acceptance of hypotheses H3 and H4. GTL is essential for building a sustainable company culture, developing a flexible green value chain, and helping achieve low-carbon economic development goals in Vietnam.

Table 7. Results of coefficient testing

Figure 2. Final research model

Analysis indicates that the relationship GI → CA has a Beta coefficient of 0.570, T = 4.699, P = 0.000, and GI → SCP has a Beta of 0.291, T = 6.562, P = 0.000. This indicates that GI promotes transparency in CA and enhances SCP. This finding is consistent with the previous studies [38-40], where the authors assert that GI helps reduce climate policy risks and increases transparency in emerging markets. Regarding SCP [43, 44, 46] emphasizes the bridging role of GI → CA and GI → SCP. In Vietnam, previous studies [22, 23, 47] also indicate that GI improves SCP, but the effectiveness is influenced by internal capacity, leadership orientation, and the legal framework. Thus, this research consolidates both domestic and international evidence and affirms the central role of GI in linking CA with SCP, while emphasizing the importance of institutions and corporate governance in realizing the value of GI, help establish credibility, transparency, and long-term value in the process of international integration.

The analysis of the current research results indicates that REG → GI has a beta coefficient of 0.299, T = 8.473, and P = 0.000, and REG → CA has a beta of 0.295, T = 2.939, and P = 0.003, demonstrating that REG plays a positive role in promoting GI and CA in enterprises. These findings are consistent with international evidence [5, 13, 19]. Van et al. [22] and Le and Gia [23] emphasized that REG promotes GI and CA primarily through internal capabilities, green leadership, EMA, and CSR, due to limited enforcement mechanisms. This result suggests that combining legal pressure with enhanced governance capacity will help improve transparency and corporate value. REG plays a role as the institutional foundation guiding corporate behavior, but to achieve sustainable effectiveness, there needs to be coordination between policies, governance, and green leadership capabilities. The interaction between REG, GI, and CA is the key that helps companies transform compliance into innovation, aiming for green growth and long-term sustainable development.

The analysis results indicate that DT has a negative relationship with CA (Beta = -0.369, T = 3.658, P = 0.000), suggesting that, in the Vietnamese context, the application of DT to CA remains limited. These findings may be associated with the fact that many firms currently focus on using DT primarily for operational optimization, cost reduction, and process automation, while information technology infrastructure and corporate governance systems are still evolving, investment costs remain high, and mandatory legal mechanisms supporting CA have not yet been fully developed. These explanations are only suggestive and require further verification in future studies, rather than treating statistical significance as evidence of an underlying mechanism. This finding differs from international evidence [34-37], which asserts that DT promotes sustainable reporting through data digitization and report automation, but it aligns with the context of Vietnam, as pointed out [62], where the impact of DT on CA and SCP remains limited. DT generates genuine value solely when directed by sustainable development objectives. Companies must realign their digital strategy to facilitate corporate accountability and transparent governance while integrating DT with GI and leadership to establish a robust foundation for sustainable success in the future digital-green economy.

Data analysis indicates that CA has a strong and positive impact on SCP (Beta = 0.574, T = 12.405, P = 0.000), affirming that carbon transparency is a crucial factor in enhancing a company's SCP. This finding is consistent with international studies [48-52], which emphasize that CA, along with green accounting, green strategies, and green intellectual capital, can increase company value and SCP. However, unlike the context of countries with strong legal frameworks and governance, in Vietnam, this positive impact is only truly realized when CA is accompanied by a carbon accounting system, clear governance mechanisms, and green strategies; otherwise, it may lead to superficial disclosures. The research findings demonstrate that CA exerts a significant and favorable influence on SCP. The integration of CA with transparent governance processes and green policies is recognized as a crucial element in converting transparent data into sustainable value, while also markedly improving SCP. The research findings establish a scientific basis for informing the formulation of policies and laws aimed at enhancing carbon transparency, given the evolving legal framework and governance structure of Vietnam.

The regulatory role of GCA in the GI → SCP relationship: The analysis results indicate that the regulatory effect of GCA in the GI → SCP relationship is not statistically significant (Beta = -0.076, T = 1.863, P = 0.062). This suggests that GCA is not yet strong enough to reinforce the role of GI in enhancing SCP in Vietnam. This result contrasts with international studies [43, 46] which assert that GCA increases the positive impact of GI on SCP. This difference may be explained by the context of Vietnam, where resources and technology for GI are still limited, leading to GCA not fulfilling its supportive role as strongly as in countries with more developed institutional and market frameworks.

The regulatory function of GCA in the relationship between CA and SCP: In contrast, GCA demonstrates a positive and statistically significant regulatory effect on the relationship between CA and SCP (Beta = 0.057, T = 2.996, P = 0.003). This finding indicates that the presence of GCA in a company not only improves transparency but also plays a crucial role in enhancing SCP. This finding aligns with previous studies which highlighting the necessity of connecting carbon transparency with GCA to convert reporting initiatives into tangible strategic value [53-56]. In contrast to the international context, where corporate accountability typically operates within a stringent legal framework, findings in Vietnam suggest that corporate governance serves as a catalyst, enhancing the significance of CA and preventing superficial reporting.

The direct influence of GCA on SCP: Beyond its regulatory function, GCA exerts a direct, positive, and statistically significant effect on SCP (Beta = 0.135, T = 4.139, P = 0.000). This signifies that GCA not only indirectly augments sustainable value via CA but also exerts a direct influence on total efficacy. This finding aligns with earlier research [31, 32] which confirms that GCA is a fundamental component propelling organizations toward the attainment of sustainable development goals. In Vietnam, GCA functions as an internal strategic catalyst and a mechanism that aids enterprises in optimizing CA, underscoring the necessity of incorporating GCA into sustainable management plans.

Hypothesis H9 (GCA x GI → SCP) was removed from the research model because the PLS-SEM bootstrapping results showed a p-value of 0.062, which exceeds the 0.05 significance threshold, indicating that this relationship is not statistically significant. The exclusion of H9 does not weaken the model; rather, it helps clarify the model’s depth by demonstrating the selective moderating effect of GCA, which is strong for CA but weak for GI. Robustness checks comparing the models with and without H9 showed that the coefficients and significance levels of the remaining relationships did not change substantially, confirming that the removal of H9 is justified. This represents an important difference from previous studies and, at the same time, constitutes a novel contribution to the literature.